Five Mortgage Fact to Know When Buying Houses Near Orlando FL
When you are looking to buy houses near Orlando Fl, one of the scariest parts of the buying process can be getting a loan. It’s an intimidating process for most folks, separating fact from myth. A mortgage is a very important part in almost every real estate transaction and there is plenty of misinformation out there on the internet and when you talk to people you know. When you need a mortgage, whether it is for an investment property or a primary residence, you should educate yourself as much as you can so you know what you are getting into. Some information you may already know, but other information may surprise you. Below are five mortgage facts that may surprise you:
1) There is no such thing as a True First Time Homebuyer Program.
A huge myth with the mortgage industry is that there are discounts for first-time homebuyers. Even those these programs are worded cleverly, there really is no discount or down payment reduction that is reserved if you are buying a home for the first time. Buyers get confused with FHA loans that offer minimal down payment programs. These programs are not solely offered to people who have never owned a home. In fact, they are offered to buyers who currently have no other mortgage. And a first-time homebuyer is not someone who has never owned a home before; they are actually someone who hasn’t owned a home in three years. So if you bought and sold your home, and have maybe rented or stayed with a family member for three years, congratulations, you are again a first time home buyer! So if your lender claims to have a program exclusive for first-time homebuyers, you may want to find out the facts and details.
2) There is a 30 Day Payment Window
It is important to pay your bills on time, especially your mortgage on houses near Orlando FL, so you do not impose late fees and for your credit not to take a hit. Usually, with your mortgage, you will have a grace period of fifteen days to get your payment in before your lender will charge a late fee. But do you want a little secret? If you are late, it will not take a toll on your credit until after the thirty-day window. Creditors will not consider it late until 30 days. Now don’t get into the habit of waiting until the 29th day of your period, but this does give you a little breathing room when life gets in the way.
3) You Have Four Months Until Foreclosure
Pretty much everyone has the basic idea of the foreclosure process. You don’t pay, the bank takes your house. Pretty much common sense. But what you may not know is that the foreclosure process after you miss four payments in a row. That is the point your lender will send you a notice saying that they are moving forward to foreclose on the property. During month one to month four, the bank has been sending you letters for payment and calling you to catch you up. Foreclosure laws vary depending on the state you are in, but everything does start on the 120th day.
4) Making Extra Payments toward the Principal Does Help
If you want to pay off your mortgage quickly, the trick is to pay extra towards your principal payment. This will increase your equity in your houses near Orlando FL. If you have a thirty-year mortgage on your house and you apply one extra month a year towards the principal, you will cut about seven years off your mortgage. Even if you can not make an extra month of payment per year, applying anything extra towards your principal helps a lot. So what you can you give up in your daily life for an extra principal payment? Maybe Starbucks?
5) Interest Rates Matter, but only on Larger Loans
Everyone is looking to get the lowest possible interest rate, but in reality, a smaller interest rate may not make a big difference in your monthly mortgage payment. On a $100,000 loan, the difference between an interest rate of 3.5% and 4.5% is only $57 per month. Now on a loan of $300,000, the same rates would see a $173 difference per month. Regardless of the interest rate, you will want to lock it in sooner than later before it does go up more.
Questions?
No matter how many times you pull out a loan, make sure you get the facts from your mortgage broker or banker and if you have any questions, ask them. If they can’t answer them, or they take longer than twenty-four hours to get back to you, you might want to shop for a different lender.